United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MISS CECILIA IVIMY (of Counsel) UNISON Legal Department 1 Mabledon Place London WC1H 9AJ
For the Respondents	NO APPEARANCE BY OR ON BEHALF OF THE RESPONDENTS


 


MR JUSTICE BURTON: This is an appeal against an decision of the Employment Tribunal sitting at London (South) dismissing the complaint of the Applicant, Mr Russell, arising out of a transfer of undertaking between the first Respondent and the second Respondent. The fortunate fact is that the Applicant did not in fact lose his employment or, indeed, any pay; the issue is that he was not informed, as the Appellant asserted, in breach of the Transfer of Undertakings (Protection of Employment) Regulations 1981. The Tribunal concluded that had they found that there was a breach of the Regulations they would have awarded the sum of £277 to the Appellant. The Appellant has appealed against the dismissal of his application, consequent upon which he would be entitled to £277 on a successful appeal.

1. After the grant of leave to appeal at the preliminary hearing, the first Respondent, the transferor, has conceded, as it was put in its solicitor's letter of 21st September 1999, that the Employment Tribunal erred in law, and informed this Tribunal that it had agreed with the Appellant that the appeal would be allowed by consent and that there be substituted for the decision of the Tribunal a decision that £277 compensation should be paid by the first Respondent.
2. In the light of that, the matter has come before us today with only the Appellant appearing, the appeal having been consented to, as we have indicated, by the first Respondent, and in those circumstances withdrawn against the second Respondent.
3. This is of course a situation in which an appellate body is overturning a considered decision of a Tribunal below, and it is not possible or appropriate in those circumstances for that to be done by consent, but of course where one party does not oppose, it makes the task of the Appellant much more easy and Miss Ivimy has had no difficulty in persuading us with the benefit of a skeleton argument and her brief oral submission.
4. The one hiccup, which I should mention now, is that the Tribunal in paragraph 7 ordered that had they not concluded as they did that the application should fail, the sum of £277 should be paid by the first Respondent, and the first Respondent, as we have indicated, is willing to pay that sum on the allowance of the appeal. Miss Ivimy has indicated that as a result of recent jurisprudence it is possible that there might be an argument that the liability rests rather with the transferee than with the transferor, and the transferee, namely the second Respondent, is no longer a party to this appeal. That appears to us not to be a problem at all in the present case, for all the reasons that are apparent from what I have already said, but this judgment should not be considered to express any view, one way or the other, as to where the responsibility in fact lies as between transferor and transferee; the result in this case, on the appeal being allowed, will simply be that the first Respondent will pay and, indeed, has agreed to pay the fortunately small sum of £277.
5. The legal point arising in the appeal is that in this case the employer, the transferor, the first Respondent, failed to inform the Appellant or any representative of the Appellant. There was no representative of the Appellant appointed, and the first Respondent contended before the Tribunal that its only obligation under the Regulations was to inform a representative of the employee, and as there was no representative of the employee there was no one for them to inform and they were under no obligation to inform the Appellant/employee direct. Consequently, they were under no duty to inform and were in no breach of that duty. That argument found favour with the Employment Tribunal, and consequently the application was dismissed.
6. It is noteworthy that Article 6(5) of the Acquired Rights Directive 77/187/EEC expressly provides:

"5. Member States may provide that where there are no representatives of the employees in an undertaking or business, the employees concerned must be informed in advance when a transfer within the meaning of Article 1(1) is about to take place."

No such Regulation has been expressly passed by Parliament and incorporated into the 1981 Regulations. That no doubt influenced the Tribunal in declining to, as they saw it, imply an obligation into the Regulations.

7. It is most unfortunate that two matters were not referred to the Employment Tribunal which have been referred to us today by Miss Ivimy and which appear to us to be decisive. The first is, as I shall explain in a moment, Regulation 10(7) of the 1981 Regulations which, although it was plainly recited before the Tribunal, because it is briefly referred to in paragraph 2 of its decision, was clearly not incorporated into any argument or relied upon by the Appellant as it could or should have been; and secondly, an extremely significant decision, to which our attention has been drawn by Miss Ivimy of Regina v Secretary of State for Trade and Industry Ex parte UNISON [1996] ICR 1003, was not referred to the Employment Tribunal by any of the parties.
8. I deal first with the Ex parte UNISON case. That was a case in the Queen's Bench Divisional Court in which there was a challenge to the 1981 Regulations on a number of bases, one of them being that the Regulations had failed adequately to implement the Directive because they did not ensure that employers could not impede the protection afforded to employees, in that the United Kingdom has failed to provide for the designation of employee representatives where an employer did not agree to representation. The decision of the Court in Ex parte UNISON was that there was no lacuna in the Act, the lacuna being just that which in this case the Tribunal implicitly found to exist. The problem that the Tribunal saw was as follows: Regulation 10(2) provides:

"Long enough before a relevant transfer to enable the employer of any affected employees to consult all the persons who are appropriate representatives of any of those affected employees, the employer shall inform those representatives of –

a) the fact that the relevant transfer is to take place …

(b) the legal, economic and social implications …

(c) the measures which he envisages he will … take in relation to those employees …"

The Tribunal commented after citing that Regulation:

"There appears to be no duty to inform and consult individual employees when no representative has been elected."

Regulation 10(8) provides:

"Where –

(a) the employer has invited any of the affected employees to elect employee representatives, and

(b) the invitation was issued long enough before the time when the employer is required to give information under paragraph (2) above to allow them to elect representatives by that time,

the employer shall be treated as complying with the requirements of this Regulation in relation to those employees if he complies with those requirements as soon as is reasonably practicable after the election of the representatives."

The conclusion of the Tribunal, after citing that Regulation, was:

"We do not regard this as putting an onus on an employer to invite employees to elect employee representatives."

9. If the Tribunal was right, therefore, there is indeed a lacuna in the Regulations, because as employer only has to inform employee representatives and not employees, there having been no express Regulation passed as might have been passed had this Member State passed a Regulation in accordance with Article 6(5) of the Directive, to which I have referred; and, consequently, if there were no representatives then the employer neither needs to cause such representatives to be created, nor needs to inform or consult an employee who has no representative.
10. Although this was not directly the point in the Divisional Court, because the attack was on the Regulations themselves as having inadequately implemented the Directive on a number of grounds, it is clear that the fact that there is no lacuna was expressly dealt with by Otton LJ, expressing satisfaction with the way the Regulations were structured. He indicated at page 1020C as follows:

"Thus compliance with Directive (75/129/E.E.C.) is achieved by imposing a primary duty to consult "appropriate representatives". If there is no such representative the employer is in breach unless he can show …"

then he continued by reference to exceptions which were specified under the Regulations relating to redundancy, which are in identical terms with those, to which I shall refer in a moment, relating to the transfer of undertakings. But it is clear that he was indicating that there was a primary duty on the employer unless he can show he is within one of the specified exceptions. Otton LJ continues at F:

"Thus the employer is deemed to comply if he has invited employees to elect representatives and given enough time to allow for elections. I am persuaded that this is an effective provision. It does not permit the employer, as contended by the applicants, to avoid his obligations to consult; it provides an alternative to actual compliance. Any failure to comply with the primary obligation … exposes the employer to sanctions …"

He concludes:

"Accordingly there is no gap in the protection … I have come to the conclusion that the first complaint which was upheld by the Court of Justice in respect of both Directive[s] … has been remedied by imposing the primary obligation to consult. …"

11. That decision is clearly decisive in concluding that there is no lacuna and this Employment Tribunal has concluded wrongly that there is one. It is clear to us, applying now the Regulations for the first time as far as we know in a case directly on these Regulations, that the right answer is as follows:

(1) Exactly as Otton LJ found, there is a "primary" duty on employers to inform employee representatives under Regulation 10(2).

(2) If employers do not inform employee representatives they are in breach, whether or not such employee representatives exist.

(3) What might otherwise seem strange, namely imposing a statutory obligation to do the impossible, is remedied. It is remedied in two ways:

(i) By Regulation 10(8) provision is made that where the employer has invited any employees to elect employee representatives their duty is fulfilled by consulting those representatives;

(ii) Paragraph 10(7) provides:

"If in any case there are special circumstances which render it not reasonably practicable for an employer to perform a duty imposed on him by any of paragraphs (2) to (6), he shall take all such steps towards performing that duty as are reasonably practicable in the circumstances."

12. It is quite plain that one special circumstance which renders it not reasonably practicable for an employer to perform a duty to consult an employee representative is if there are no employee representatives. It is equally clear that the step which is reasonably practicable to resolve that problem is for the employer to invite an employee to appoint a representative under Regulation 10(8), and then, if no such representative is appointed, the employer is entitled to perform its duty under 10(2) by informing the employee himself or herself, and thus avoid what would otherwise be a breach of the absolutely duty to inform a representative. That is a perfectly satisfactory arrangement made by these Regulations and is one of which, it is quite plain, this Respondent was in breach, as found in the alternative by the Tribunal in paragraph 7.
13. In those circumstances, we are content to allow this appeal.